The January/February issue of Risk Management is now online here.

Included are features covering:

• Robots, and how they have begun their invasion of the most benevolent kind 
• Becoming a better risk manager
• The risks ahead for 2012
• A maximum loss value framework

This issue’s columns cover:

• Last call for the soft market
• Improving supply chain resiliency in China and beyond
• ERM within the construction industry
• Notifying the exposed after a data breach
• Is terrorism coverage givin you a false sense of security?
• Many more

If you enjoy what you seen online, you can subscribe to the print edition to enjoy even more content.

Please let us know what you think in the comments below. And stay tuned to the blog for even more coverage in the future. Lastly, you can follow the magazine on Twitter, “like” us on Facebook and join our LinkedIn group.

As a result, the governor of Port Said, Egypt, has resigned while the head of the country’s football association has been fired and the board dissolved.

This catastrophe highlights a long-standing violent link between live sporting events and rabid fans. Here’s a glimpse at some of the most recent examples of violence in sports:

• In October 2004, fans of the Boston Red Sox rioted just outside of Fenway Park after the Red Sox won the American League Championship Series over the New York Yankees. Police used “pepper guns” in some cases and an Emerson College student, Victoria Snelgrove, was killed by a pepper filled paintball-like projectile which hit her in the eye.
• On November 19, 2004, near the end of an NBA game between the Indiana Pacers and Detroit Pistons, a brawl erupted between Pacers players and Pistons supporters.
• On April 12, 2005, the UEFA Champions League quarterfinal between intracity rivals AC Milan and Inter Milan was abandoned after Inter fans threw missiles and flares on to the pitch at the San Siro stadium, with AC Milan goalkeeper Dida hit by a flare.
• In May 2006 during an Australian Football League match between North Melbourne and St Kilda, a North Melbourne fan had a provocative confrontation with coach Dean Laidley, to which Laidley responded with a verbal barrage, inviting the fan to the club rooms to see how badly the players were feeling due to their consistently poor on-field performance. The incident was captured on Australian national television. The fan committed suicide by throwing himself in the path of an oncoming train the next morning.
• On June 6, 2010, the final game of the Greek Basket League finals between ancient rivals Olympiacos and Panathinaikos degenerated into what one commentator called a “night of shame” for Greek basketball. Panathinaikos entered the game, held at Olympiacos’ home of Peace and Friendship Stadium, with a 2–1 lead in the best-of-5 series. The homestanding Reds fans were reportedly incensed at what they considered to be biased officiating in the Greens’ favor in Game 3. The violence began even before tipoff, with police forced to use tear gas on rioting Reds fans; the game started 40 minutes late. In the third quarter, with PAO leading 50–42, the game was halted for about an hour after Olympiacos fans threw various incendiaries at the PAO bench, with one smoke bomb exploding next to the bench. By the time the teams resumed play, all but about 2,000 fans had left. Then, with little over a minute left in the game and PAO ahead 76–69, many of the remaining Reds fans began throwing objects on the court, leading the officials to suspend play and forfeit the game to PAO, giving the Greens the title. The new champions had to be escorted off the floor by riot police. The league organizer, HEBA, fined Olympiacos €111,000 and required them to play their first nine home games of the 2010–11 season behind closed doors and without live TV coverage.
• The next meeting between the two teams, this time hosted by Panathinaikos on January 12, 2011, saw Olympiacos win 65–61, followed by a rain of incendiaries from Greens fans at the Reds.
• The 2011 Vancouver Stanley Cup riot immediately followed the loss of the Vancouver Canucks hockey team to the Boston Bruins in the deciding Game 7 of the Stanley Cup Finals in June of that year.
• Later in the same month, major violence broke out involving supporters of historic Argentine football club River Plate during and after their promotion/relegation playoff with Belgrano. The first leg on June 22 in Córdoba was delayed for 20 minutes after River Plate hooligans tore through a fence and stormed the field to verbally and physically attack River players. The second leg, on June 26 at El Monumental in Buenos Aires, had what was reported to be the largest security presence for any match in the country’s history, with over 2,200 police called in. However, it was not enough to keep River hooligans, angered at what became the club’s first relegation from the top flight in their history, from rushing the field. Violence quickly spread, with fires set in the stadium, pitched battles between hooligans and police, and looting in nearby areas. At least 35 police and 55 civilians were reported to have been injured.
• On December 21, 2011, a fourth round match in the 2011–12 KNVB Cup between Eredivisie clubs Ajax and AZ at Ajax’s home of Amsterdam Arena was marred by a violent fan incident. In the 36th minute, Ajax held a 1–0 lead when a fan ran on the pitch and launched a karate kick from behind at AZ goalkeeper Esteban Alvarado. The player responded by kicking the fan several times before security arrived. When Alvarado was sent off for retaliating against his attacker, AZ left the pitch, and the match was abandoned. The KNVB rescinded the red card and ordered the match replayed in its entirety behind closed doors on January 19, 2012. Ajax was also fined €10,000 for failing to prevent the fan—who was supposed to be serving a 3-year stadium ban—from entering the pitch, and given a suspended one-match spectator ban (not including the replay). Ajax accepted the penalties, and announced that it had given the fan a 30-year stadium ban and a lifetime ban from the club and its season ticket list.

It’s clear that event management companies within the sports industry need more robust risk management methods.

Risk has changed immeasurably over the past few decades. Anyone who has been trying to manage it knows that. Yesterday, speaking at the World Captive, Willis CEO and Chairman Joe Plumeri highlighted this phenomenon — and how it is making the jobs of risk managers that much harder.

“Traditional property/casualty risks endure,” said Plumeri, “but the nature of risk is changing … As the risk landscape evolves and includes both natural and man-made catastrophes, organizations need to build resilience against the unpredictable. Insurance serves as a powerful ally for organizations to tackle these new risks and in many ways, insurance is the bridge between anticipation and resilience.”

Plumeri also broke down the history of the captive insurance, starting with its beginnings in the 1980s when companies increasingly found the traditional insurance market to be ineffective.

“The captive insurance industry has evolved and now offers a robust and effective approach to help firms become resilient in the face of unpredictable risks,” said Plumeri. “Captives play a key role in the insurance industry, offering creative solutions for critical risks.”

We can expect those risks to only become more “creative.” Fortunately, the modern risk manager — if she is doing her job correctly — is one of the most creative problem solvers any organization can posses. The key, as Plumeri noted, is anticipation.

Can your creativity stay ahead of the changing nature of risk?

Take Kenneth Cole. Back in the early days of the Arab Spring, the company’s founder tweeted something insensitive that made light of the violent revolution that was taking place. “Millions are in uproar in #Cairo. Rumor is they heard our new spring collection is now available online,” tweeted Mr. Cole. The response was outrage from people worldwide on social media platforms and even the mainstream press detailing how the company had goofed.

Now, the fallout from this reputation wasn’t as financially damaging as, say, the PR nightmare following Toyota’s poor handling of its massive recall in 2010. But plenty of others have felt the increasingly influential power of social media. Social Media Influence highlights the recent bad press Carnival Cruises and McDonalds have received.

Fortunately, they also have some advice for companies who suffer such a fate. Enter the social media crisis response plan. They have created the flow chart below to help guide your decision making after the worst occurs. Click here for a larger version then print it out, laminate it and put it on your wall.

On the 10-year anniversary of September 11, we took a look at some of the deadliest terrorist attacks in history. Those attacks that have been most spectacular in nature — such as the unique means used in 9/11 and the U.S.S. Cole bombing and horror of rampages such as those in Mumbai and Norway — have been the most memorable in recent times. But a majority of the deaths that have ever been attributed to terrorism have come during old-fashioned car bombs.

To illustrate just how deadly some of the worst car bombs have been, FreeInsuranceQuotes.com created an infographic that catalogs the devastation. Above is a snapshot of the image. You can find the full version after the jump.

Click here for full-size.

Think of data as a living organism.

Just like a human body, data has various components and life support systems that must be maintained to ensure the whole thrives and survives. You can think of a data risk specialist as a doctor trying to keep the organism healthy through its various life stages.

Data, our hypothetical patient, (you’re welcome Star Trek fans) needs a safe and healthy environment, a supportive lifestyle and good hygiene. Just as a doctor has to consider external threats (“do you smoke?”) so does the data risk manager.

Let’s look at what this all means, and how this philosophy can be applied to your businesses policies and practices.
Data, our hypothetical patient, has three basic forms: paper, electronic and human memory.  A good data risk management plan must consider all three.

Controlling paper and electronic data is what we think of most when considering data security. This is your standard (or what should be standard) security policy, access controls procedures, system audits, and the like. It’s where security planning meets IT.

Human memory is a little more elusive. Education, security training and a reward-demotion plan can help control human errors, as can confidentiality agreements, and project-specific security contracts. These are the tools of teachers and lawyers. Generally speaking, there are four key rules to protecting data in all its forms:

1. Be stingy with sensitive data, internally and externally;
2. Provide access to data on a need-to-know basis;
3. Provide access only to that specific data, rather than entire data sets;
4. Be deliberate in how data is handled, used and shared.

Data has a life cycle. If your data doesn’t, it should. Whether it’s government secrets or an online shopper’s credit card number, data is received or created within your company’s computer systems. It is used, maintained and stored. It is archived or destroyed. That data, in all cases, has three basic states: in action, in motion or at rest. Take the credit card number example: that information can be used, the card charged, or moved to another computer system, or archived. Use, motion, rest.

There are four fundamental rules regarding the life cycle of data:

1. If the organization doesn’t need it, don’t collect it.
2. If data must be collected, collect only what is needed.
3. If data is needed, control it and encrypt it.
4. When data is no longer needed, get rid of it – SECURELY.

Now that we know what data looks like (paper, electronic, mnemonic) and how it lives (in action, in motion, at rest) we should consider those external threats, namely data breaches. A data breach is an incident (or series thereof) in which sensitive, protected or confidential information has potentially been viewed, stolen or used with unauthorized access. This can be a hacker attack, an internal company mistake that results in exposed information or, in some cases, corporate or government espionage. A data breach can be anything that jeopardizes data.

These threats range from simple user negligence, operating or systemic issues, all the way to highly complex criminal attacks launched against your organization. As anyone who follows the tech news knows, sensitive consumer and business information has become a criminal commodity.
With this hostile environment in mind, it is imperative for the business to plan and prepare not only for the protection of their information, but also for the response and recovery of their data and business in the event of a data breach. For a data manager or security professional to fail to issue such a warning would be akin to that doctor not asking about smoking.

At the end of the day, data as an organism is more than an extended metaphor. It’s a means to look at your company’s data products in an abstract way and understand how it operates. This, in turn, will allow you to develop the proper health plan. Just like with our health, there is no single wonder pill. But there are data doctors out there who can analyze your businesses’ risk posture and recommend ways to get it in shape.

Of course, we weren’t the only ones to come up with a list of 2012′s top risks. Among others, one organization that did was insurance broker Willis. Its subject experts did write ups on 18 different areas of risk. There are links to each in their “WillisWire Emerging Risks Round-up.”

• Energy:  “Fracking”
• Environmental: “Fracking”
• Mining: “Contingent Business Interruption”
• Supply Chain Interruption: “Issues at Subtier Suppliers”
• Trade Credit – “Political-Economic Turmoil”
• Financial Institutions: “Bradley Manning 2.0”
• Terrorism: “Cyber Terror”
• Aerospace: “Space Tourism”
• Power & Utilities: “Sodium-Sulfur Batteries”
• Health Care: “Booming Physician Employment”
• Renewable Energy: “Uncertainty Caused by National Energy Policies”
• Captives – “Transfer Pricing”
• Political Risk: “Continued Unrest in Egypt & Libya”
• Analytics: “Over-Reliance on Models”
• D&O: “International Cooperation of Regulators”
• Engineering: “‘Hold Harmless’ Legal Contracts”
• Life Sciences: “’No Fault’ Compensation for Clinical Trial Patients”
• Employee Safety: “Obesity Epidemic”

IT departments play a pivotal role in identifying and mitigating exposures to cyber threats. However, there are risks that exist outside the company network. Businesses may be overlooking other points of vulnerability where a hacker can potentially attack, including but not limited to company cell phones, smart phones, tablets, laptops and other mobile devices. Every type of technology brings the potential for a cyber crime. Even if every employee is securing their personal and work technologies constantly, information can be compromised.

Institutions that understand the commitment necessary to create a robust anti-fraud program have a plan in place that involves numerous security options. This includes proper breach response planning, establishing information, and insurance protection. Corporate risk managers can be a valuable asset to their companies by becoming part of the planning process. They can also activate their professional networks and refer their companies to other advisers for additional guidance including lawyers, crisis communications specialists and other professionals.

Corporate risk managers should also advise their companies on the importance of employee engagement as part of a cyber risk management plan. When employees understand the potential impact on the company (possibly including their job security) they are likely to be more willing to take the necessary precautions to protect company information by following established protocols for information security. Employees should understand the costs associated with addressing a breach including having to install credit monitoring for hacking victims, liability expenses and potentially losing business and even deterring new business opportunities from prospective clients who get wind of security failures. Getting full buy-in and participation for mitigating cyber risk from the top down in an organization can make a significant impact on reducing cyber exposures.

Operating without a cyber risk management plan could have a crippling effect on a company’s reputation. The way in which companies respond to cyber threats can be scrutinized by clients, stakeholders and the public, especially because victims are often directly impacted by slow response. For example, if a company does not respond quickly, victims of the crime may miss opportunities to cancel credit cards and alert their banks about suspicious activity. The window for fraudulent activity can be prolonged by companies that are unprepared to deal with a cyber breach. With a strategy in place for responding to a cyber event, businesses can execute against their plan and focus on getting back to business as usual.

As cyber attacks dominate headlines, companies must make efforts to properly secure both their technology and networks. Recent media reports have identified major companies, organizations and governmental entities across the U.S. as unfortunate examples of what can happen when a business is unprepared for a cyber crisis. Corporate risk managers can help their companies to adapt their risk management strategies and practices so that their employees and their customers remain ahead of emerging cyber risks.

More evidence that rates are headed north surfaced yesterday. The latest quarterly property/casualty survey from the Council of Insurance Agents & Brokers came out. And as the chart above illustrates, there’s no surprise here: rates are on the rise in the face of insurer catastrophe losses, falling reserves and rising underwriting discipline.

Commercial property/casualty pricing rebounded in the fourth quarter of 2011, according to The Council of Insurance Agents & Brokers’ quarterly Commercial P/C Market Index Survey. On average, small, medium and large account pricing increased 2.8 percent last quarter, compared with a -5.4 percent decline in the same period last year. The market hit its low point in the third quarter of 2007 with an average -13 percent decrease and has been slowly clawing its way back up ever since.

“It’s clear from the data that the market continued its upward momentum in the fourth quarter,” said Ken A. Crerar, president/CEO of The Council. ““Capacity was still strong, but prices rose in the face of declining underwriting profitability, dwindling reserves and huge catastrophic losses.”

Another key finding was, as anticipated, the effect that RMS 11 is having on property pricing.

Carriers were “reviewing all property based on RMS11 modeling,” said one broker from the Southeast. “The RMS CAT Modeling for property was used widely — more property insurers since the third quarter,” said a broker from the Northeast. “Many clients saw this for the first time.”

Large buyers fared better than their smaller counterparts but there were increases across the board. All told, here are the full results broken down by account size.

If Aaron Rodgers switched to Allstate, he would’ve had protection from mayhem, like the Giants.

This of course is based on the insurer’s “mayhem” ad series.

In fact, they have become such infamous and popular commercials that BusinessInsurance.org ranked it first in its list of the 10 best insurance commercials.